DFDS report strong profits despite Brexit threat

Ferry operator DFDS has reported another record year for 2017, with the company’s annual results released this morning showing an operating profit of DKK2.7 billion, or £321 million, last year.

Despite ongoing uncertainty caused by Brexit, the company’s operations across Europe continued to grow into the fourth quarter, with a positive consensus looking into 2018 based on recent key indicators.

“Overall, North Sea freight volumes grew by seven per cent in 2017.

“In spite of the Brexit issue, and the delayed Brexit agreement between the UK and EU, we see that the UK’s economy is still growing, albeit at a slower pace,” said Niels Smedegaard, president, DFDS.

“According to the UK government’s official prognosis, growth is expected to continue at just over one per cent in 2018.

ADVERTISEMENT

“At the moment, we even see an increasing growth in British exports, which also contributes positively to our developments on our ten North Sea routes.

“Brexit is not what we hoped for, but it does not change our confidence about the future.

“The official expectation is that the UK economy will keep growing (although at a slower pace), and as the EU economy is also predicted to grow and both parties depend on trade, we are hopeful for the future.”

Operations across Europe continued to grow in quarter four 2017, including in the UK – DFDS’ largest market – where export volumes continued to grow at a high rate, while import volume growth slowed due to reduced car imports.

Demand for passenger services was stable in quarter four as demand in the UK continued to stabilise.

In 2017, DFDS invested significantly in their digital infrastructure and will increase these investments in 2018, introducing systems for bookings, payments and journey planning, across all devices, including mobile.

New apps for freight customers and their drivers were recently introduced to make it easier for them to work with DFDS.

Company revenue is expected to increase around two per cent in 2018, excluding acquisitions while investments company-wide are expected to amount to around DKK1.1 billion, or £130 million.

Trading in 2018 is expected to remain robust with growth across Europe expected to mitigate the inevitable uncertainty caused by the Brexit negotiations.

To accommodate the expected volume growth over the coming years, DFDS has ordered four new mega ships with a capacity of 475 trailers each for the North Sea traffic.

The ships will be delivered from 2019 and onwards from the Jinling Shipyard in China.

“In spite of the challenges Brexit may lead to over the coming years, we can also see opportunities for providing our customers with new, valuable, customs clearance services after Brexit, should customs clearance become necessary,” added Smedegaard.